Chinese smartphone maker Xiaomi confirmed with the Global Times on Saturday that it has filed a lawsuit against the US defense and treasury departments over an investment ban that forces American investors to divest their holdings from the company’s securities.
The electronics giant’s move is likely to be followed by other Chinese companies that have seen their interests harmed by what they call unjustifiable bans and sanctions aimed Trump’s crackdown on China’s tech sector. Xiaomi’s move is likely to encourage other companies to the legal system to defend their legitimate rights and interests, experts said.
The lawsuit comes after the US Defense Department added nine Chinese firms to a blacklist of companies with alleged ties to the Chinese military in mid-January. The companies on the list are being subject to harsh restrictions, including a new investment ban that blocks American investors from holding Chinese companies’ securities. So far, Xiaomi, planemaker COMAC, chipmaking giant Semiconductor Manufacturing International Corp, and drone maker Shenzhen DJI Technology Co are among the companies on the blacklist.
“Such investment bans imposed by the US government on Chinese companies have no legal basis, and are nothing but administrative acts carried out only for Trump’s political needs,” He Weiwen, a former senior trade official and an executive council member of the China Society for World Trade Organization Studies, told the Global Times on Saturday.
Chinese companies, not just Xiaomi, should seek a reversal of restrictions imposed during the Trump era through legal means, which might make the US government think twice when it comes to recklessly clamping down on Chinese companies, He said.
According to Xiang Ligang, director-general of the Beijing-based Information Consumption Alliance, Xiaomi’s chance of reversing the investment ban is hard to say, and it will take long time for the company to get a result from the court.
“But by filing the case, Xiaomi has shown its attitude in standing up to the unfair treatment imposed by the US government, which could be conducive to promoting Xiaomi’s brand image among Chinese consumers,” Xiang told the Global Times on Saturday. “That’s why companies, which are aimed directly at the masses, are more likely to pursue litigation in the US-China tech war.”
Chinese telecommunications giant Huawei and ByteDance, the parent company of short-video platform TikTok, have also filed lawsuits against the US government over administrative restrictions that have slammed their business.
Although the cost of litigation is very high and the procedure is complicated, Chinese companies should be encouraged to fight back and defend their interests, He noted.
Xiaomi’s shares have lost about 10 percent of their value since the US added it to the blacklist.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
